Houston’s economy growing, but not as fast as once thought

Construction created less than half the jobs in Houston in 2018 as originally thought, which economists believe is likely due to overestimates of Hurricane Harvey recovery work.

Photo: Paul Sakuma, STF / AP

Houston added jobs for the 16th consecutive month in January as the local economy continues expand — but not as fast as a earlier thought.

The region gained 4,600 jobs in January, the Texas Workforce Commission reported Friday, while unemployment continues to tick down. The jobless rate in January was 4.5 percent, down from 4.8 percent in January 2018.

But revisions to last year’s data shows that the Houston metropolitan area’s employment growth was not as strong as earlier estimates indicated. The region added about 73,000 jobs last, down from the initial estimate of 108,000. The oil and gas industry’s 2018 gains were whittled to 3,100 jobs form 4,500. The revisions cut manufacturing job gains last year by one-third and construction by one-half.

Still, said Patrick Jankowski, an economist with the business group Greater Houston Partnership, 2018 was a better-than-good year for the Houston economy, just a few years removed from the worst oil bust in a generation. A good year typically means the creation of 60,000 to 65,000 jobs.

“Overall, I’m pleased with what the data says about Houston,” Jankowski said. “A few sectors struggled but overall we had solid growth last year.”

The U.S. Labor Department revises state and local employment statistics each year to reflect additional data that is collected after the initial estimates are made. Houston economists expected that the sky-high numbers first reported would be revised downward.

The state’s blistering job growth in 2018 also was revised downward, to about 290,000 jobs from initial estimates of about 390,000, a decline of about 100,000 jobs.

Both Houston and the state have enjoyed a robust growth as the energy industry continues its rebound and a strong national economy provides support. Texas added about 15,000 jobs in January. The uenmployment rate ticked up to 3.8 percent from 3.7 percent in December. .

The state and the region have been buoyed by the recovery of the energy industry from the oil price collapse that began in late 2014 and a strong national economy that is on track for the longest expansion in post-World War II history.

Most economists predict Houston’s economy will remain strong, but that growth this year is likely to slow along with both the state and national economies. In February, the nation added just 20,000 jobs, the smallest job gains in 17 months, the Labor Department reported Friday.

The Texas Workforce Commission will release state and local employment figures in two weeks.

The Greater Houston Partnership predicts another year of solid growth is ahead for metropolitan Houston, forecasting the region will add about 71,000 new jobs in 2019.

Houston’s economy is expected to be bolstered by a number of large construction projects planned for 2019 valued at several billion dollars. LyondellBasel, for example, has broken ground on a $2.4 billion petrochemical plant in Channelview; German-based Convestro plans to start construction of a $1.7 billion petrochemical plant in Baytown; and McNair Interests plans to break ground on a $500 million, high-end mixed-use development in the Uptown-Galleria area.

John C. Roper is the senior economics and finance reporter for the Houston Chronicle, where he covers economic trends, jobs, financial markets and banking. John has worked two decades as a reporter for newspapers, wire services, magazines, radio and network television news. As a journalist, he’s traveled to more than 50 countries while covering the Pentagon, White House, State Department, Justice Department, and Congress. John was raised in Boulder, Co., and is a long-time member of the KFL, a fantasy football league that was established in 1978 and is believed to be among the longest continually running leagues in the nation.